A major U.S. legislative effort to establish a clear regulatory framework for the cryptocurrency market now faces a potential multi-year delay, according to analysts at investment bank TD Cowen. Lawmakers had hoped to finalize a comprehensive market structure bill this year, but political dynamics in Congress are pushing the timeline forward. Passage could slip to 2027, with implementation of the rules not occurring until 2029.
TD Cowen’s Washington research team said Tuesday that while technical language for the bill has been under development for months, lawmakers’ motivation to finalize the legislation before the 2026 midterm elections appears weak. Democrats, in particular, may view the election as an opportunity to improve their standing in the House of Representatives, reducing the urgency to push the bill through in the current session. That strategic calculation, combined with the need for broad support in the Senate, complicates efforts to meet a 2026 deadline.
The delayed timeline would push full enforcement of the regulatory framework toward the end of the decade. Under the scenario outlined by TD Cowen, the bill could pass in 2027, with final rules not taking effect until two years later. The extended timeline reflects both political negotiation and negotiations over specific provisions that have proven contentious.
Political Conflict Holds Up Crypto Regulatory Reform
A central point of disagreement surrounds proposed conflict-of-interest provisions aimed at restricting senior government officials from holding or operating crypto-business interests. Democrats are advocating for strict limits on such activities. However, immediate enforcement of these provisions has drawn resistance from Republican lawmakers and could directly affect high-profile figures, adding political risk to the negotiations.
TD Cowen analysts noted that some lawmakers are considering delayed enforcement of these ethics provisions — potentially up to three years after the bill becomes law — as part of a compromise to keep the broader legislative package moving. Under that approach, conflict-of-interest rules could take effect around the same time as the rest of the bill’s framework, in 2029.
In addition to procedural hurdles, the measure still requires the support of at least 60 senators to overcome filibuster thresholds. That votes requirement means lawmakers must build bipartisan backing, a process that often extends legislative timelines even in non-crypto policy areas.
The delay in passing a comprehensive crypto market structure bill means that U.S. digital asset firms and investors could remain in regulatory limbo for years, navigating a patchwork of rules from existing agencies such as the Securities and Exchange Commission and the Commodity Futures Trading Commission. Analysts warn that prolonged uncertainty could influence business decisions and industry competitiveness as other jurisdictions continue to refine their regulatory frameworks.
Historical Context and Legislative Background
This latest market structure effort follows earlier regulatory attempts, including the Financial Innovation and Technology for the 21st Century Act (FIT21). Passed by the House in May 2024, FIT21 aimed to clarify digital-asset regulatory responsibilities between federal agencies, defining when assets are treated as commodities or securities. That legislation passed with bipartisan support but stopped short of establishing the comprehensive regime now under negotiation.
The market structure bill has been discussed for over a year, building on the House approval of FIT21 and subsequent negotiations with the Senate. Lawmakers have repeatedly highlighted the need for regulatory clarity to support innovation, protect investors and compete globally. However, each delay extends the period in which crypto firms operate under existing, sometimes ambiguous, enforcement priorities.
